feasibility study of a bank in canlaon city
TRANSCRIPT
INTRODUCTION
It is time to picture the Canlaon City of today in its proper
perspective, by viewing it according to its noble goals and objectives,
which are formulated towards attaining a transformation from what
she has done in the past, towards what she can do at the present, in
garnering a dependable socio-economic image specifically geared
towards development. With the inclusion of Canlaon City in the third
batch of CDS (city development strategy) cities, its envisioned plan is
to craft a well formulated tool for planning and development which will
be truly responsive to the demands of the future.
As local government gains experience in managing growth and
change, its institutional capability improves considerably. The present
investments from both public and private sectors have greatly
improved the quality of service and utilities made available to the
constituents. This is expected to raise the level of the public’s well
being, and foster social change and development.
It has been noted, however, that a city without a bank is not
complete. After the closure of the Rural Bank of Canlaon in September
1986, most financial transactions have ended up being made outside
of Canlaon, thereby pulling out cash for circulation and putting it into
nearby cities with banking institutions, instead of circulating the
resources within the area. It is evident that Canlaon is generating
income but other municipalities/cities are gaining from the proceeds of
it.
Based on an analysis of the interviews conducted,
mismanagement could be pinpointed as one of the reasons why RB
Canlaon closed after approximately 5 years of operation. Unsecured
loans to farmers without proper assessment or appraisal of the area,
without follow ups and assistance, led to a majority of loans defaulted
upon and giving rise to the sentiment occasionally voiced that “the
people didn’t like to pay back their loans.” No other banks wanted to
buy Rural Bank of Canlaon since the CB required that any sale would
also have to include assuming the Rural Bank’s previous accountability
with Central Bank which amounts to approximately P80 million.
We recommend that in order to avoid repeating the mistakes of
RB Canlaon, DCDB Canlaon branch should: maintain a high liquidity
ratio especially during its first 3 years of operation, carefully screen all
loan applicants to ensure their capability to pay, monitor its loan
portfolio constantly with regard to non performing loans, invest in a
varied portfolio such as t-bills and other government securities, and
only grant loans which are backed up by sufficient collateral.
In order to foster the goals of the city towards development for a
larger swathe of the community, it is imperative that a financial
institution with integrity, supply much needed financial services to the
local population from within the locality. This fits right in with the
vision of Dumaguete City Development Bank which in its 26 years of
operation has remained a responsible partner in serving the local and
neighboring Visayas and Mindanao business communities and has also
attained the highest public trust.
In the CDS plan for the year 2007, one of the strategies of
Canlaon City is the “development of commercial and industrial growth
centers outside the present city center.”
As the study team proposes a suitable location that is in the
Uptown area, this will further coincide with the City’s plans for
development. The proposed location is in the Uptown area, which is
outside the city center. The land is beside the City Mayor’s residence,
fronting the market for the region’s high-value crops, such as lettuce,
cabbage, cauliflower, and others. However, worth noting is the
statement of the landowner explaining that this was an excellent
location due to the proximity to the Mayor’s residence and the security
provided at that location.
OBJECTIVE OF THE STUDY
This study aims to determine the feasibility of establishing a
branch of Dumaguete City Development Bank in Canlaon City.
This study also aims to identify which products and services of a
bank the prospective market would like to avail of.
It also seeks to determine the size of the prospective market and
aspects related to the success of the bank.
SCOPE AND LIMITATIONS
The main focus of this project study is the feasibility of the
proposed branch of DCDB in Canlaon City. Like most business
proposals, feasibility criteria have major aspects that need to be
considered in arriving at final conclusions and recommendations. The
aspects that need to be factored into this study are divided into
marketing, organization and management; the technical, financial,
socio-economic aspects, and legal aspects.
Responses to the questionnaire were limited to employed
residents of Canlaon City, both government and non-government, as
well as small and medium business establishments. These were
considered the target market as they are the most likely users of the
banks services both as depositors and loan makers as they possess
sufficient income to save and also have the capability to repay loans
taken. Only those who were identified as part of the target market
were considered and given the chance to answer the questionnaires
regarding the establishment of the bank.
SIGNIFICANCE OF THE STUDY
The intention of this study is to aid, guide, and assist the
proponent in determining whether or not to establish the business.
This study would help the DCDB Board of Directors in determining the
viability of establishing a branch in Canlaon City.
METHODOLOGY
A market survey was conducted to determine the market
demand for the proposed project.
An analysis of the market demand is important in order to
determine if the target market will patronize the proposed project.
To draw a conclusion for its market demand, the researchers first
determined who the target markets were. The target markets
identified were the employed residents of Canlaon City and small and
medium business establishments.
Employed residents refer to the City’s labor force and are
categorized as follows: government, private and self-employed
individuals. In order to define the population of these markets, the
researchers requested assistance from the City Planning Office of
Canlaon, obtaining and reviewing documents showing the total number
of employed residents of that city.
The sample size was determined using Slovin’s Formula.
Questionnaires were distributed to respondents based on the
computed sample size. After retrieving the questionnaires, the
responses were tallied and graphed. These were then analyzed and
interpreted.
SLOVIN’S FORMULA:
n = N
1 + N (e) 2
where:
n = sample size
N = total population, male and female of the employed sector if Canlaon City
e = sampling error of 5%
Permanent Government
Employees
343
Permanent Private Employees 4,618
Self Employed 4,838
Total 9,799
Figures based on Population Distribution by Status of Employment
2003
NSO Census 2003
n= 9,799
1 + 9,799 (5%) 2
= 384 sample size
The researchers also conducted interviews with key people
whose inputs were essential to the feasibility study. Please see the
section on Market Feasibility regarding the highlights of the interviews.
FEASIBILITY CRITERIA
There are several factors considered from the different aspects
of the study:
The demand for a bank and the willingness of the respondents to
patronize the products and services of the proposed project were the
factors used in determining the feasibility of the market study.
The factors considered in determining the technical feasibility of
the project were the location of the building, accessibility to the target
market, layout and human resources required, equipment costs, and
cost of land.
The evaluation of the financial feasibility was done through the
financial projections.
The socio-economic aspect of the project considered its
economic contributions and other benefits to the City and the society
as a whole.
PROJECT SUMMARY
A. NAME OF THE PROJECT
The name of the proposed project is Dumaguete City
Development Bank (DCDB), Canlaon Branch, Negros Oriental.
B. LOCATION
The DCDB Canlaon Branch will be located in Uptown Barangay
Mabigo, Canlaon City. Its main office or head office is located at the
corner of Dr. V. Locsin Street and Cervantes Street, Dumaguete City.
Canlaon City, situated on the eastern side of Mt. Kanlaon, in the
province of Negros Oriental, is politically bound on the north by San
Carlos, Province of Negros Occidental; on the east by Vallehermoso,
Province of Negros Oriental; on the west by the Municipalities of La
Castellana and Pontevedra, Province of Negros Occidental; and on the
south by the Municipality of Guihulngan, Province of Negros Oriental.
The city is strategically situated nine-and-a-half (9.5) kilometers
from the foot of Mount Kanlaon – an active volcano in Negros Island,
bearing geographic location at 10° 24.7’ North Latitude, 23° 7’ East
Longitude.
The City is geographically divided into three sectors: Downtown,
Midtown/City Center, and Uptown. The City Center is 38 kilometers
away from San Carlos City, Negros Occidental; 50 kilometers from
Guihulngan City; 20 kilometers from Vallehermoso; 102 kilometers
from Bacolod City, the capital of Negros Occidental (taking the cross-
island country road traversing Negros Occidental and Negros Oriental
via Canlaon City) and 166 kilometers from Dumaguete City, the capital
of Negros Oriental.
It takes three hours to Dumaguete City; two-and-a-half hours
from Bacolod City via La Castellana; and a four- to five-hour trip from
Cebu City by land and sea transport via San Carlos City.
The main industries of Canlaon city are Rice production with a
total of 3,289 hectares, and sugarcane production with a total of 3,238
hectares out of a total area devoted to Agriculture of 9,783 hectares.
The remaining area produces a mix of corn, vegetables, and livestock.
These figures are cited from the Canlaon City CDS 2007.
Further information was gathered from an interview with Mr.
Roderick Schon. He volunteered that there are 4 major and traditional
sugarcane planters in the area. He mentioned the Schon farm,
Valmayor Hermanos, Jalandoni farm, and the Amador farm. Another
major property holder especially around the mabigo barrangay is the
Bautista family.
These major planters each have total land areas of between 120
to 130 planted hectares.
The rice growers on the other hand are composed of numerous
smaller lot holders each holding between 20 to 30 hectares.
Apart from these planters and farmers there are also a few
businessmen in the community who run hardware shops, a mini
grocery and restaurant as well as branches of known motorcycle
distributors such as RUSI and Du Ek Sam. Some of the more prominent
business men/women are: Cecil Canada, Julius Amador, and the
Jalandonis.
PROPOSED SITE
The lot under consideration for the proposed DCDB bank branch
site is located on Aquino Street, beside the present mayor’s residence,
fronting the Uptown market complex. The added security is an extra
feature of this location. Other advantages of this location are: the lot
is offered at market value price, the lot has good drainage and a first
class cement barrangay road connecting the lot to the city, the Uptown
market complex which faces it is the trading area for vegetables and
livestock and is a bustling commercial hub, and this location is
identified in the CDS strategies for economic development as an area
targeted for economic growth.
C. DESCRIPTIVE DEFINITION OF THE PROJECT
Incorporated July 1980 by Julio 0. Sy, Lourdes M. Calumpang, Tita
R. Sung, Jose E. Romero, Jr. and Gregorio E. Uymatiao, Sr., the
Dumaguete City Development Bank was registered with the Securities
and Exchange Commission. on October 17, 1980. The Central Bank of
the Philippines granted DCDB authority to operate as a private
development bank and formally started operations in Dumaguete City,
Negros Oriental. In July 1990, DCBD established its first branch in the
Municipality of Valencia, Bukidnon Province.
On August 8, 1992, the bank acquired the Rural Bank of Sibulan
(Negros Oriental), Inc. On August 27, 1993, a second branch in the
Municipality of Quezon, Bukidnon Province formally started operations.
On October 16, 1993, the Lapu-Lapu City branch was its third branch.
November 10, 1993, the Bangko Sentral ng Pilipinas granted the bank
authority to accept demand deposits. On November 16, 1994,
computerization of branches’ Current Account/Savings Account began.
Today DCDB Canlaon City branch Negros Oriental is the next
target of DCDB incorporators for the expansion of the bank. The
mission of Canlaon city today is to …
“Sustain Canlaon City's position as a special growth center of Northern Negros through the protection of its environmentally critical area system, maximize the output of its agricultural, commercial, infrastructure, transport, agro-industrial and eco-tourism resources and promote massive livelihood initiatives in the rural areas for sustainable development.”
The proponent recognizes the potential of Canlaon City in terms
of its resources and the need for a bank in that area. The project would
fulfill, in part, DCDB’s mission to the community to be “a responsible
partner in the countryside economic growth and development,”
benefiting the community and contributing to the development of the
city as well.
D. PROJECT’S LONG-RANGE OBJECTIVES
Establishing a DCDB branch in Canlaon, a city rich in agricultural
resources, will provide the community with the banking and other
financial services the community needs. Accomplishing this would
contribute to the proponent’s vision to become the leading
development bank in the Visayas-Mindanao region.
A development bank’s objectives may be organized as follows:
(1) Accumulating the savings of depositors and investing them,
together with capital loans secured by bonds, mortgages in real estate
and insured improvements thereon, chattel mortgage, bonds and other
forms of security or in loans for personal or household finance, whether
secured or unsecured, or in financing for homebuilding and home
development; in readily marketable and debt securities; in commercial
papers and accounts receivables, drafts, bills of exchange,
acceptances or notes arising out of commercial transactions; and in
such other investments and loans which the Monetary Board may
determine as necessary in the furtherance of national economic
objectives;
(2) Providing short-term working capital, medium- and long-term
financing, to businesses engaged in agriculture, services, industry and
housing; and
(3) Providing diversified financial and allied services for its
chosen market and constituencies especially for small and medium
enterprises and individuals.
E. HIGLIGHTS OF THE PROJECT
1. PROJECT
A project feasibility study about the proposed project was
conducted. After determining the viability of the project, the
proposal will be forwarded to the Board of Directors of DCDB for
review and approval. Land acquisition and the construction of the
building will follow after compliance with the necessary
requirements (please refer to Appendix F). Bangko Sentral ng
Pilipinas prerequisites necessary in establishing a branch should be
complied with at this time. After all the legal requirements have
been met, and after the authority to establish a branch has been
given, the branch shall be opened within six months from the date
of approval. The target date the researchers are suggesting is
August 8, 2008 for the obvious reason that round numbers for the
Chinese origin is believed to be a lucky number that could bring
good fortune and good luck.
2. MODE OF FINANCING
The establishment of the proposed branch of DCDB in
Canlaon City will be financed solely from the capital funds of the
Dumaguete City Development Bank. On the basis of the information
supplied by the Vice President, the amount for the purchase of the
lot and the construction of the building shall be taken from existing
funds of the bank that have been earmarked for this purpose. The
DCDB Board of Directors has the intention of purchasing the land
and constructing a building that the DCDB Canlaon branch will
occupy.
F. MAJOR ASSUMPTIONS, SUMMARY OF FINDINGS AND
CONCLUSIONS OF THE FOLLOWING:
1. MARKET FEASIBILITY
In the survey conducted by the group, it was ascertained
that one of the reasons that there is a need for a banking
institution in Canlaon City is due to the absence of certain financial
services in the city such as: savings deposits, checking accounts,
commercial loans and other services that a bank normally
provides. The residents and the members of the local government
of the city have expressed their desire for a bank and emphasized
the importance and role of a bank in their city. It was also
determined that there are a number of probable clients, 99
percent of the respondents to be exact, who would be willing to
avail of the products and services that the DCDB Canlaon branch
will offer.
City Treasurer Ma. Luisa L. Luza, informed us of the
possibility of using the bank as a depository for all the financial
transactions of the government, both local and national. The
quarterly Internal Revenue Allotment, or IRA of Canlaon City for
2007 is P44,574,756.00. The monthly operating expense of the
local government is P6,458,090.00.
According to City Financial Analyst Rowena F. Oralde, if a
bank would be established, she would recommend that all salary
transactions go through the bank instead of her preparing the
necessary documents in order to withdraw the amount from San
Carlos and transporting the said amount back to Canlaon. The
total monthly salary transactions for regular government
employees of the city is P3,107,628.76.
An interview was also conducted with Ms. Doris Flores, the
City Administrator of Canlaon. Ms. Flores described the people of
Canlaon as hardworking and resilient. When asked about the
state of the City’s peace and order, she stated that said aspect
was well maintained. The internal revenue allotment (IRA) of
Canlaon as mandated by law is deposited with the Development
Bank of the Philippines (DBP) in San Carlos City and other
accounts are maintained with Landbank and the Philippine
National Bank (PNB). The requirement that the Government
deposit its money in a government bank presupposes that there is
a government bank in the immediate area but in the absence of
such the government may deposit its IRA in any private bank in
the locality for convenience as mentioned in Chapter four of R.A.
7906.
According to Ms. Flores, attempts had been made to
attract banks to establish branches in Canlaon City. A resolution to
this end had previously been passed. However, no bank
responded, it was believed, because of security reasons.
If the proponent decides to open a branch in Canlaon, Ms.
Flores said that the City would provide the security services
needed by the bank branch and that she will talk with the Mayor
regarding this. She added that the City has continuity of plans,
negating any concern regarding a change in the administration.
She said, “We really need a bank, we would be very happy if this
would push through, we will support them if they need equity for
construction. We will place our local revenues and income in
DCDB.”
Aside from security concerns, former Councilor Hernani
Blanco, who is now part of the Mayor’s policy determining body,
stated that the road conditions were the main problem banks did
not want to open a branch in Canlaon. This problem is no longer
of concern as the city government has embarked on an
infrastructure improvement program and as a result many farm-
to-market roads have been concretized and the national highway
connecting the city has also been improved.
Regarding the security concerns Blanco opined “They don’t
need to worry…we have two battalions: the 11th and 12th Infantry
Brigade assigned in Canlaon. Peace and order situation is ok
now.” This is backed up by a city crime rate of .05 percent as
seen in the CDS of 2007.
2. TECHNICAL FEASIBILITY
The technical aspect of the study shows that the project is
feasible because of certain factors.
The accessibility of the location is convenient to residents
and customers of the bank as it is within a 2 kilometers of the city
center. There is ample parking as the lot fronts the Uptown market
and also the lot is of a substantial size that a parking lot may be
incorporated into the design.
It is also feasible considering that the branch structure is
based on an existing DCDB branch (Valencia branch) and initial
human resource requirements are minimal.
The building and lot will be purchased by the bank and will
be owned by the bank. The cost of the lot is priced competitively
based on comparisons with the other prospective sites that were
identified. The lot is priced at 1,500 pesos per square meter and
the recommendation is to buy a 500 square meter lot. The
building will cover 150 square meters initially with the capacity to
add a second story, and will cost approximately 2,000,000 pesos.
The project is deemed viable because of the availability of
appropriate material and human resources of DCDB.
The description of products and services was based on
existing products and services offered by DCDB head office and
other branches. Based on the Agri Agra Law (PD 717), 25 percent
of the banks loanable funds shall be allocated for agricultural
credit.
Another consideration is the established bank operations
policies and procedures which are applicable to the Canlaon
branch without further modification.
3. FINANCIAL FEASIBILITY
The financial study was made based on the following
assumptions:
Operational Assumptions
a) The branch will start its operation on August 8, 2008
b) Bank hours will be from 9:00am to 3:00pm
c) Employees will work till 8:00am to 5:00pm with 1 hour lunch
break.
d) The bank will be open on weekdays and be closed on all
public and special holidays.
e) Cut- off for clearance of cheques will be 11:30am to allow for
travel time to BPI San Carlos whose cut off time is 1:00pm.
f) Excess funds will be deposited with BPI- San Carlos or loaned
to DCDB head office at a rate of 9 percent. A portion may be
invested in government securities depending upon the
approval of the board of directors and in accordance with the
rules and regulations of the monetary board regarding
investments.
g) Maximum of 10 percent current/saving deposits will be kept
as cash in vault
h) Company will procure a motorcycle for bank use.
i) Main office will provide a service vehicle for branch manager’s
use.
j) There will be a provision of an ATM machine in the bank
layout but it will not be installed in the first year of operation,
until the bank will be financially stable to purchase one.
k) All policies and regulations of the Department of Labor and
Employment (DOLE) will be complied with.
l) All policies, rules and regulations of the DCDB main office will
apply to the branch office.
m)The first branch manager will be an officer from DCDB main
office.
n) Rank and file staff will be recruited from qualified residents of
Canlaon.
Revenue Assumptions
a) Agricultural loans will have an interest rate of 15-18 percent,
as prescribed by DCDB bank policy and the Agri-Agra Law.
b) Commercial loans will have an interest rate of 15-18 percent,
prescribed by DCDB bank policy and the BSP.
c.) Excess funds will be loaned to DCDB main branch at the rate
of 9 percent per annum.
Expense Assumptions
a) The salary of the bank branch employees will have a three
percent merit increase every year.
b) The utility expense will increase according to current market
statistics.
c) Bank premises, furniture, fixtures and equipment are carried
at acquisition cost or construction cost less depreciation
and impairment losses.
Depreciation is computed on the straight-line basis over the
estimated useful lives of the assets as follows:
Buildings 40 years
Furniture, fixtures and equipment 1-10 years
Leasehold improvements are amortized over the terms of the
related leases or the useful lives of the improvements whichever is
shorter.
4. SOCIO-ECONOMIC FEASIBILITY
The project will be consistent with Canlaon’s economic
expansion and growth since DCDB supports the Philippine
Countryside Development Program wherein the bank strives to be
known as a “Responsible Partner for Growth” in the local business
community.
The branch should focus on getting the local government
unit as a main customer; the City Administrator stated the City’s
willingness to assist in this regard with a board resolution. The city
treasury and accounting office have also expressed their
anticipation for the establishment of a bank in the City. This would
eliminate the time required and the safety concerns inherent in
traveling to and from San Carlos and other banking institutions to
conduct the City’s banking business. The local government
employees and the teachers and employees of the various schools
in the area would be able to use these banking services, forgoing
the inconvenience of having to cash a check within the city or
going to San Carlos to do the same.
The presence of a bank in Canlaon will also have a ripple
effect on the economy of the area because by providing loans for
agricultural improvement or post harvest facilities, or commercial
loans for the start up of new businesses such as a supermarket or
a department store the standard of living of the residents will
improve. More jobs will be made available and more services will
also be accessible to the residents of Canlaon.
5. MANAGEMENT FEASIBILITY
The management structure adopted by the project is based
on the existing management structure of existing DCDB branch
offices. This provides for a bank manager, a cashier, an
accountant, an accounting assistant, a loan processor, one teller,
and a messenger/janitor.
PROJECT STATUS AND TIMETABLE
The research project started with the identification of the
proponent and the prospect study. On July 26, 2007, soon after the
proponent, Dumaguete City Development Bank, and the study to be
undertaken was identified, the group began formulating the survey
questionnaire. This took one week. The formal distribution of survey
questionnaires began on the first week of August, and lasted for three
weeks. The researchers then tallied the results during the second and
third weeks. After tallying the results, the group commenced analyzing
the collected data and drafting the feasibility study. The researchers
collected the information necessary to accomplish the project during
the fourth and fifth weeks. The period from August 13 to September 3
was used to focus on the Technical and Financial Study of the project.
Finally, the last week of the study was spent on encoding and
reviewing of the completed draft. The study ended on September 7,
2007.
PROJECT TIMETABLE
A. Project Feasibility Study
B. Ocular/Site Inspection
C. Purchase of Land
D. Processing of Business Permit
Building Permit Fencing Permit Fire Safety Sanitary Permit Occupancy Permit Mayor’s Permit
E. Construction of Building
F. Application for Authority to Establish a Branch (Form 1)
“Agreement to Organize a Bank” (Form 2) Bio-data sheet of each of the incorporators, proposed directors
and officers, and subscribers (Form 3) Copy of Board Resolution authorizing the corporation to invest in
such branch; and designating the person who will represent the corporation in connection therewith
Copy of the latest Articles of Incorporation and By-Laws List of directors and principal officers List of major stockholders, indicating the citizenship and the
number, amount and percentage of the voting and non-voting shares held by them
A copy of the corporation’s audited financial statements for the last two (2) years prior to the filing of application
A copy of the corporation’s annual report to the stockholders for the year immediately preceding the date of filing of application
Certified photocopies of Income Tax Returns for the last (2) calendar years
BIR clearance Detailed Plan of Operation and Economic Justification for
Establishing the branch Projected monthly financial statements for the first three (3)
years of operations, together with reasonable assumptions. Certificate of Compliance signed by the president stating
required capital for the branch
G. Hiring and Training of Officers and Staff
H. Issuance of authority to operate requirements
Receipt of advice of approval by the Monetary Board/Governor of the application for authority to establish the branch
Complete construction and furnishing of the bank building, which shall be equipped with vault and appropriate security devices such as lighting system, time delay device, tamper-resistant locks, alarm systems, etc. and provided with furniture, fixtures, equipment and bank forms;
Effect and complete the recruitment and hiring of officers and employees of the bank
Submit the following documentary requirements at least thirty (30) days before the scheduled start of operations: -Proof of registration of Articles of Incorporation and By
Laws-Certification of compliance with the conditions of approval
duly signed by the incorporators-List of officers and their respective designation and
salaries;-Bio-data sheet, evidence of citizenship and NBI and BIR
clearances of each of the officers (who have not had the previous approval of the Monetary Board/Governor) which are needed for the evaluation of their qualification as officers
-Chart of Organization-Manual of Operations embodying the policies and
operating procedures of each department/unit/office.-Plantilla showing the positions with corresponding salaries-Two (2) sets of specimens of principal bank accounting
and other forms
-Bond policy of officers and custodial employees-Insurance policy on bank properties required to be insured-Blueprint of floor layout of bank premises
I. Inauguration/Opening of the branch for business (Target Date is August 8, 2008)
J. Requirements within 30 days after first day of operations
Inform BSP of the first day of operation and the banking hours and days
Submit a Statement of Condition as of the first day of operation
GANNT CHART
ORGANIZATION AND
MANAGEMENT ASPECT
A. ORGANIZATION AND MANAGEMENT
A thrift bank shall be organized in the form of a stock
corporation. The Monetary Board shall fix the minimum paid-up capital
of thrift banks in such amount as the Board may consider necessary for
the safe and sound operation of thrift banks taking into account the
development thrusts of this Act and due protection of the general
public. No thrift bank shall be organized without a certificate of
authority from the Monetary Board.
Republic Act 8791, The General Banking Law, Section 15,
“Board of Directors”. The provisions of the Corporation Code to the
contrary notwithstanding, there shall be at least five (5), and a
maximum of fifteen (15) members of the board or directors of a bank,
two (2) of whom shall be independent directors. An "independent
director" shall mean a person other than an officer or employee of the
bank, its subsidiaries or affiliates or related interests.
Non-Filipino citizens may become members of the board of
directors of a bank to the extent of the foreign participation in the
equity of said bank.
The meetings of the board of directors may be conducted
through modern technologies such as, but not limited to,
teleconferencing and video-conferencing. Sec. 16. Fit and Proper Rule,
To maintain the quality of bank management and afford better
protection to depositors and the public in general the Monetary Board
shall prescribe, pass upon and review the qualifications and
disqualifications of individuals elected or appointed bank directors or
officers and disqualify those found unfit.
After due notice to the board of directors of the bank, the
Monetary Board may disqualify, suspend or remove any bank director
or officer who commits or omits an act which render him unfit for the
position.
In determining whether an individual is fit and proper to hold the
position of a director or officer of a bank, regard shall be given to his
integrity, experience, education, training, and competence.”
Republic Act 7906, Thrift Bank Act, Section 7, “Directors and
Officers”, states, “At least a majority of the members of the board of
directors of any thrift bank which may be established after the
effectivity of this Act shall be citizens of the Philippines: Provided,
however, That no appointive or elective official, whether full-time or
part-time, shall at the same time serve as officer of any thrift bank,
except in cases where such service is incident to financial assistance
provided by the government or a government-owned or controlled
corporation to the bank: Provided, further, That in the case of merger
or consolidation duly approved by the Monetary Board, the limitation
on the number of directors in a corporation, as provided in Section 14
of Republic Act 7906 ,shall not be applied so that membership in the
new board may include up to the total number of directors provided for
in the respective articles of incorporation of the merging or
consolidating banks.”
DCDB SENIOR MANAGEMENT
Executive CommitteeGregorio L. Uymatiao, Jr. ChairmanSusano O. Sy Vice-ChairmanNicholas S. Ramas-Uypitching MemberSilvestre H. Sung MemberMa. Vivian Joyce V. Sastrillo Member
Corporate Management and OfficersJulio O. Sy PresidentGregorio E. Uymatiao, Sr. TreasurerMa. Vivian Joyce V. Sastrillo Executive Vice
PresidentSinfronio C. Viloro Vice President/Area ManagerMargarito E. Credo Assistant Vice
PresidentRowena I. Buling ComptrollerBilliam G. Sy Internal Auditor
Head OfficeConsolacion Gilda F. Elli Assistant Manager-HRDWalden E. Justalero Loan Officer
Dumaguete BranchFloranita U. Calaurian ManagerMa. Rosario I. Espina CashierMa. Elvie J. Teves Accountant
Assets and Liabilities Committee Ma. Vivian Joyce V. Sastrillo ChairmanGregorio L. Uymatiao, Jr. Vice-ChairmanSilvestre H. Sung MemberJocelyn S. Limkaichong MemberRowena I. Buling MemberFloranita U. Calaurian MemberConsolacion Gilda F. Elli MemberWalden E. Justalero Member
Compliance, Audit and Examination CommitteeNicholas S. Ramas-Uypitching ChairmanMiguel A. Diaz Vice-ChairmanJulio O. Sy Member
B. FORM OF OWNERSHIP
Ownership of thrift banks, “At least forty percent (40%) of the
voting stock of a thrift bank which may be established after the
approval of this Act shall be owned by citizens of the Philippines,
except where a new bank may be established as a result of a merger
or consolidation of existing thrift banks with foreign holdings in which
case, the resulting foreign holdings shall not be increased but may be
reduced and, once reduced, shall not be increased thereafter beyond
sixty percent (60%) of the voting stock of thrift banks. The percentage
of the foreign-owned voting stocks shall be determined by the
citizenship of individual stockholders and in case of corporations
owning shares, by the citizenship of each stockholder in the said
corporations.”
C. ORGANIZATIONAL CHART
ORGANIZATIONAL CHART OF PROPOSED DCDB CANLAON BRANCH
D. JOB DESCRIPTION
Position Title: BRANCH MANAGER
BASIC RESPONSIBILITIES:
Branch Manager
Branch Cashier Branch Accountant
Accounting Assistant
Loans book keeper
Loan Processor
Messenger/Janitor
Branch Teller
Responsible for the overall supervision of the Cash, Accounting
and Account Services Sections to ensure achievement of deposit
targets, maintain good client relations as well as the proper
implementation of bank policies and procedures including submission
of accurate and timely reports required by the Head Office.
SPECIFIC RESPONSIBILITIES:
1. Develops marketing strategies, plans and programs needed to
ensure achievement of performance targets in terms of deposit
levels.
2. Reviews daily call reports of Accounts Services Representatives;
monitors significant accomplishments; provides marketing
support whenever necessary to capture available opportunities.
3. Monitors daily performance of Accounts Services Representatives
and Accounts Services Assistant; provides training to enhance
marketing skills.
4. Monitors quality of service rendered by field and office personnel
to maintain good client relations. Ensures fast, timely and
reliable servicing of accounts; renders corrective measures to
remedy customer complaints, answers inquiries or addresses
concerns raised by clients.
5. Monitors movements of accounts; studies the peculiarities of
each account to identify business potentials.
6. Supervises the Cashiering and Accounting functions to comply
with the bank’s policies, procedures and reporting requirements.
7. Supervises the preparation and distribution of the monthly bank
statements.
8. Performs other tasks as may be assigned from time to time.
Position Title: CASHIER
BASIC RESPONSIBILITIES:
Responsible for the custodianship of items of value such as cash,
managers checks, time deposit certificates, passbooks, checkbooks,
security/investment papers, unused DCDB checks of other banks and
accountable forms. Also responsible for ensuring that Tellers and other
frontliners under the Cash Section render quality service and are
customer oriented at all times.
SPECIFIC RESPONSIBILITIES:
1. Monitors the daily flow of cash to ensure adequacy of cash
reserve/cash in vault; maintains the Cashier’s Accountability
Book reflecting daily cash movements;
2. Ensures that actual cash in vault balances off with records all the
time and that bills have been carefully counted and bundled
preventing shortages or overages.
3. Assists in monitoring daily cash transactions of Main Branch and
other branches to ensure adequacy of bank reserve in
compliance with Central Bank requirement.
4. Coordinates fund transfers to and from branches with the Fund
Management Unit and depository bank.
5. Verifies and approves over the counter withdrawals and
encashment to authenticate signatures and check the identity of
payees as well as validate sufficiency of account balance.
6. Monitors amount of cash handled by each Teller; replenishes
cash upon request; verifies and receives surrendered excess
cash to maintain safe levels in Teller’s box.
7. Assists Tellers in reviewing the day’s transactions to trace errors
resulting to shortages, overages or incorrect proof sheet
balances.
8. Reviews checks deposited; supervises transmittal/deposit of
checks to depository bank for clearing; notifies clients of
returned checks.
9. Calls on current account clients in case of insufficiency of funds
to avoid nonpayment or non-clearing of issued checks.
10. Leads and trains the front liners in rendering good service and
maintaining professional client relations.
11. Reviews the Teller’s proof sheet before submission to
Accounting.
12. Closely coordinates with corporate clients regarding payroll
arrangements for continued satisfactory service.
13. Acts as custodian of all accountable forms of the bank and
monitors its usage and inventory level. Safe keeps signature
cards, unreleased checks to clients (TD interest, loan proceeds,
loan rebates, etc.) and unused Time Deposit certificates.
14. Countersigns for IOAs, checks and withdrawals from other banks,
investments and borrowings.
15. Assists Tellers in the delivery of cash to valued accounts upon
request.
16. Performs other tasks as may be assigned from time to time.
Position Title: ACCOUNTANT
BASIC RESPONSIBILITIES:
Responsible for the over-all supervision of Main Branch
accounting work mainly the recording, checking of computations and
verification of time deposit and loan transactions. Also responsible for
overseeing the preparation of daily accounting and cash reports and
the disbursement functions.
SPECIFIC RESPONSIBILITIES:
1. Checks and verifies computation of time deposit transactions
such as placements, terminations, pre-terminations and
renewals.
2. Supervises the Accounting Staff and Bookkeepers in areas of
receiving loan payments and time deposit placements,
disbursements, timekeeping, updating accounts, loans
bookkeeping and general accounting.
3. Verifies entries in the trial balance against source documents to
check correctness of accounting classification and figures
recorded.
4. Checks and verifies computation of interest in loans.
5. Checks and verifies list of back accounting transactions to ensure
correctness of entries and figures.
6. Approves over-the-counter transactions independently for
withdrawals of P20,000.00 and below; co-signs with Cashier for
withdrawals of more than P20,000.00.
7. Reviews tickets prepared by Accounting Staff such as payment of
expenses and deposits to other banks.
8. Checks monthly reports prepared by Bookkeepers of time
deposit, loans and general accounting.
9. Verifies bank reconciliation statements on a monthly basis.
10. Countersigns for/recommends approval of IOAs, cash advances
and DCDB checks issued.
11. Performs other tasks as may be assigned from time to time.
Position Title: TELLER
BASIC RESPONSIBILITIES:
Responsible for the efficient handling of transactions involving
receipt and payment of cash and checks. Also responsible for
rendering quality service to maintain good client relations and promote
the bank’s services.
SPECIFIC RESPONSIBILITIES:
1. Receives cash and checks for such transactions as savings and
current account deposit, time deposit placement, loan payments,
SSS payments and others.
2. Checks quality of bills and verifies cash count.
3. Sorts cash according to quality and bundles them accordingly to
facilitate counting.
4. Pays cash for such transactions as withdrawals, check
encashment and others’.
5. Verifies validity of order to pay; checks date, name of payee as
against identity of presentor, amount in words and figures and
authenticity of signatures.
6. Checks account balances and secures the approval of assigned
authorities prior to any payment.
7. Updates passbooks after completion of each transaction.
8. Maintains adequate amount of cash to serve transactions;
requests additional cash or surrenders excess cash whenever
necessary for security reasons.
9. Prepares proof sheet to summarize transactions processed
during the day and counter check totals with other sections.
10. Verifies cash count of withdrawals from depository bank.
11. Acts a Roving Teller; picks-up deposits.
12. Performs other tasks as may be assigned from time to time.
Position Title: LOAN PROCESSOR
BASIC RESPONSIBILITIES:
Responsible for effectively identifying business prospects,
preparing suitable loan packages that meet clients’ needs, processing
and monitoring of loan accounts.
SPECIFIC RESPONSIBILITIES:
1. Identifies potential loan borrowers; visits prospective accounts
and offers the bank’s loan facilities and discusses how the bank
can assist in the growth of the business.
2. Studies and analyzes the business prospects, its viability as well
as the credit worthiness of the borrower and the project. This
would involve interviews with prospects, ocular inspection of
project sites, review of feasibility study and analysis of financial
projections and other related activities that can further
strengthen the positive prospects of the business.
3. Ensures timely submission of complete loan
requirements/documents.
4. Prepares loan reports that provide accurate figures and reliable
data/information that can be used by the Credit Committee in
endorsing loan applications for approval of the Board of
Directors.
5. Follows-up the documentation process; prepares the credit
implementation ticket to ensure prompt release of loan
proceeds.
6. Computes for net loan proceeds and verifies correctness from
Accounting.
7. Personally attends to clients for signing of loan documents and
actual release of loan proceeds.
8. Visits projects and monitors business progress and collection
performance.
9. Prepares post-release documents of refinanced accounts.
10. Regularly updates loan documents of existing loan accounts.
11. Coordinates with Collection Unit regarding problem accounts;
offers solutions to problems encountered by borrowers.
12. Perform other tasks as may be assigned from time to time.
Position Title: GENERAL BOOKKEEPER
BASIC RESPONSIBILITIES:
Responsible for the preparation of the daily trial balance and
counterchecking T-accounts of other Sections to validate consolidated
report. Also responsible for the maintenance of the general ledger and
subsidiary ledgers of the Main Branch.
SPECIFIC RESPONSIBILITIES:
1. Prepares the daily trial balance and counterchecks entries with
proofsheet of other sections.
2. Manually balances CA/SA transactions and counterchecks with
computer print-out on a daily basis; balances computer print-out
of accounts by subtype and size against trial balance.
3. Posts daily transactions in the general ledger and subsidiary
ledgers.
4. Computes for the month-end accruals of expenses payables and
amortization of prepaid expenses and deferred expenses to
prepare the month-end proofsheet.
5. Files transaction tickets according to account title.
6. Prepares Main Branch accounting reports for submission to the
Controllership Unit.
7. Prepares SSS collection remittance for all branch collections.
8. Prepares month-end and quarterly reports such as income
statement and various schedules of the Main Branch. Performs
other tasks as may be assigned from time to time
Position Title: MESSENGER/JANITOR
BASIC RESPONSIBILITIES:
Responsible for the prompt and efficient delivery of letters, bank
statements, reports and other communication materials to clients,
other banks and other private and government agencies. Also
responsible for maintaining cleanliness of office premises which
includes work stations, executive rooms, reception areas, toilets, the
conference room, etc. as maybe assigned.
SPECIFIC RESPONSIBILITIES:
1. Plans daily itinerary and daily work priorities to maximize time
and effort as well as ensure prompt delivery of outgoing
documents.
2. Regularly cleans service vehicle.
3. Regularly cleans assigned areas. Collects and disposes garbage
at the end of the day. Washes dishes at the end of the day.
4. Assists in the repair and maintenance of office facilities,
plumbing and electrical works, office equipment and furniture.
5. Assists in the purchasing functions of immediate supervisor.
6. Performs other tasks as may be assigned from time to time.
E. JOB SPECIFICATION
MINIMUM QUALIFICATION REQUIREMENTS
MANAGER
Must be a graduate of a business course
At least 5 years work experience in marketing or client
relations
With very good communications and interpersonal skills
He must be fit and proper for the position he is being
proposed/appointed to. In determining whether a person is
fit and proper for a particular position, the following
matters must be considered:
- integrity/probity;
- competence;
- education;
- diligence; and
- experience/training.
CASHIER
Must be a graduate of a business course preferably
accounting
At least five years work experience in bank operations in a
supervisory capacity
ACCOUNTANT
Must be a Certified Public Accountant
At least five years bank accounting work in a supervisory
capacity
LOAN PROCESSOR
Graduate of a four-year course
At least 2 years experience in a related field
Must have working knowledge on credit investigation,
appraisal, financial analysis
Must be aggressive and a self-starter; able to work with
minimum supervision
Must be an effective communicator (oral & written
communication skills)
GENERAL BOOKKEEPER
Must be an accounting graduate
At least one year accounting work experience
TELLER
Must be a graduate of a business course
With good communications and interpersonal skills
MESSENGER/JANITOR
At least college level
Has ability to drive a motorcycle and car
Hardworking
MARKETING ASPECT
A. PROJECT DESCRIPTION
The name of the project is Dumaguete City Development Bank,
Canlaon City Branch, Negros Oriental. As defined in Republic Act No.
8791 The General Banking Law of 2000, banks shall refer to entities
engaged in the lending of funds obtained in the form of deposits.
There are many classifications of banks, most common of which are
the universal banks, commercial banks, rural banks, cooperative banks
and thrift banks.
Republic Act No. 7906 also known as the “Thrift Banks Act of
1995” refers thrift banks to include savings and mortgage banks,
private development banks, and stock savings and loans associations
organized under existing laws.
“In addition to powers granted it by this Act and existing laws,
any thrift bank may:
(1) Accept savings and time deposits
(2) Open current or checking accounts: Provided, That the thrift
bank has net assets of at least Twenty million pesos (P20,000,000)
subject to such guidelines as may be established by the Monetary
Board; and shall be allowed to directly clear its demand deposit
operations with the Bangko Sentral and the Philippine Clearing House
Corporation
(3) Act as correspondent for other financial institutions
(4) Act as collection agent for government entities, including but
not limited to, the Bureau of Internal Revenue, Social Security System,
and the Bureau of Customs
(5) Act as official depository of national agencies and of
municipal, city or provincial funds in the municipality, city or province
where the thrift bank is located, subject to such guidelines as may be
established by the Monetary Board
(6) Rediscount paper with the Philippine National Bank, the Land
Bank of the Philippines, the Development Bank of the Philippines, and
other government-owned or controlled corporations. Said institutions
shall specify the nature of paper deemed acceptable for rediscount, as
well as rediscounting rate to be charged by any of these institutions
(7) Issue mortgage and chattel mortgage certificates, buy and
sell them for its own account or for the account of others, or accept
and receive them in payment or as amortization of its loan.
Such mortgage and chattel mortgage certificates shall be issued
exclusively in national currency and exclusively for the financing of
equipment loans, mortgage loans for the acquisition of machinery and
other fixed installations, conservation, enlargement or improvement of
productive properties and real estate mortgage loans for: (a) the
construction, acquisition, expansion or improvement of rural and urban
properties; (b) the refinancing of similar loans and mortgages; and (c)
such other purposes as may be authorized by the Monetary Board.
A thrift bank shall coordinate the amounts and maturities of its
certificates with those of its loans, so as to ensure adequate cash
receipts for the payment of principal and interest at the time they
become due. The bank shall accept its own certificates at least at the
actual price of issue, in any prepayment of loans which mortgage or
chattel mortgage debtors may wish to make: Provided, That the date
of maturity of the certificates is not later than the date on which the
payment would otherwise become due, in the absence of the aforesaid
prepayment
(8) Purchase, hold and convey real estate under the same
conditions as those governing commercial banks
(9) Engage in quasi-banking and money market operations
(10) Open domestic letters of credit
(11) Extend credit facilities to private and government
employees: Provided, That in the case of a borrower who is a
permanent employee or wage earner, the treasurer, cashier or
paymaster of the office employing him is authorized, notwithstanding
the provisions of any existing law, rules and regulations to the
contrary, to make deductions from his salary, wage or income pursuant
to the terms of his loan, to remit deductions to the thrift bank
concerned, and collect such reasonable fee for his services
(12) Extend credit against the security of jewelry, precious
stones and articles of similar nature, subject to such rules and
regulations as the Monetary Board may prescribe
B. DESCRIPTION OF TARGET MARKET
The target markets of the proposed project are the local
government of Canlaon City, the employed residents of Canlaon City
and nearby municipalities and the small and medium business
establishments. Employed residents refer to the labor force of the city
and are categorized as: government, private and self-employed
individuals.
Other Target Markets identified are the large scale planters and
different businessmen in the community who would most likely avail of
loans.
C. DEMAND FOR BANKING SERVICES
The survey showed that 60 percent of the respondents have an
existing bank account. Thirty-six percent do not patronize any banking
institution. Four percent did not answer the question. To determine
the demand for the business, the data gathered, as shown in Figure 12
shows 99 percent in favor of DCDB opening a branch in Canlaon City
and 99 percent ready to avail of its products and services. One percent
do not favor the project.
Canlaon City is a third class city in the province of Negros
Oriental, Philippines. According to the 2000 census, it has a population
of 46,548 people in 9,302 households.
The financial resources of the local government of Canlaon for
the year 2007 are broken down as follows:
Revenue per Month
Taxes, Licenses, Permits
P14,224,342.32
National Government Subsidiaries P 14,858,252.00
Other Sources P 1,233,522.76
In Negros Oriental, the government plans to concentrate on the
development of the province’s geothermal resources. It is building an
additional 20-megawatt power plant at Palinpinon II, and another 40-
megawatt power facility in Northern Negros near Canlaon City.
As mentioned in the project description, the additional powers of
a thrift bank is to act as an official depository of national agencies and
of municipal, city or provincial funds in the municipality, city or
province where the thrift bank is located, subject to such guidelines as
may be established by the Monetary Board. The government sector
would be the major client of the prospective bank. The list of clients
would include teachers of the various schools in the area, employees of
privately-owned businesses, and small and medium enterprises.
For the government clients and other businesses, payroll can be
facilitated through the bank, negating the need for transacting
business in San Carlos or elsewhere. Currently, Canlaon employees
have to travel to San Carlos City, Negros Occidental, to collect their
salary, cash their cheques, or have them cashed at certain
establishments in Canlaon for a fee.
At present, these resources are not put to use productively in
Canlaon City; the employees tend to do their shopping in San Carlos
City since they are already there. The market opportunities created by
a bank branch in Canlaon City for small to medium businesses make
this project viable.
D. SUPPLY
Although there are no existing banking institutions in Canlaon
City, there are other financial institutions that more or less provide
similar services. There are three pawnshops: Palawan Pawnshop,
Chamar Pawnshop, and Cebuana Lhullier which also provides the
service of pera padala, and Western Union. There is one lending
investor, AAA Agency, which is based in San Carlos City. Credit
cooperatives also accommodate loans, and among the three biggest in
Canlaon are the Bucalan Multipurpose Credit Cooperative, Canlaon City
Government Employees Credit Cooperative and Canlaon City
Multipurpose Development Credit Cooperative. As shown in Figure 15,
47.9 percent of the respondents avail their loans from SSS/GSIS, 22.9
percent from Credit Cooperatives, 20.2 percent from pawnshops, 7.3
percent from informal lending and 1.7 percent from other institutions.
And as shown in Figure 8, 60 percent of the respondents have existing
bank accounts.
Based on the survey conducted, the respondents avail of the
services of the institutions mentioned above.
E. DEMAND-SUPPLY ANALYSIS
In determining the demand and the supply for financial services
of the proposed project, the researchers concluded that there is a high
demand for a bank in Canlaon City. The lack of a bank in the city has
resulted in the respondents turning to other financial institutions like
credit cooperatives and pawnshops. Aside from that they use the
services of banks outside the city regardless of distance, cost and time
considerations. This shows that there is demand and a lack of supply
of financial services which a local bank could provide.
F. PRICE STUDY
Bank charges:Bank certification P50.00Purchase of a Manager’s check, MC P20.00Documentary stamp on MC P1.50Inter-branch transfer P50.00
regardless of amountBelow minimum balances P25.00 per month(current and savings, or C&S)
Dormant C&S accounts P30.00 per month
Overnight checks:if funded or deposited after closingtime or a late deposit P100.00
if funded on the next banking daybefore clearing or cut-off time P600.00
if not funded or returned P1,100.00Demand deposits:
Minimum initial deposit P 5,000.00Minimum maintaining balance P 2,000.00Average daily balance to earn interest P50,000.00
Savings deposits:Minimum initial deposit P 500.00Average daily balance to earn interest P1,000.00
Preferred savings deposit:Minimum deposit of P50,000.00 for one month (renewable)
The interest, amount earned on time deposits, are subject to twenty percent withholding tax, as prescribed by the BSP policy.Deposits are covered under PDIC maximum of P250,000.00
DCDB offers these rates for the following deposit products:
- Super Privileged Time Deposit gives 6.5% per annum with a
term of five years; interest payable monthly and will be credited to
your current or savings account.
- Interest rates on Time Deposits and Preferred Savings Deposit:
AMOUNT (Pesos) Interest
Rates (%)
5,000.00- 99,999.99 2.25
100,000.00- 499.99.99 2.50
500,000.00- 999,999.99 2.75
1,000,000.00- 4,999,999.99 3.00
On 5M and above, a special rate may be given.
- Savings Deposit accumulates 1.5% per annum, which requires a
monthly minimum balance.
- As for the loans, the rates range from 15% - 18% per annum,
explains DCDB Loans Department.
G. MARKET ANALYSIS
There are basically two factors affecting the market; these are
internal and external factors.
INTERNAL FACTORS
1. Location
Most if not all of the respondents do their banking in
San Carlos City, Guihulngan City, Dumaguete or outside the City
of Canlaon. Accessibility of the business or the bank would
attract the market to not go out of Canlaon City, but instead do
their banking transactions where it is near.
2. Interest Rates
High interest rates on savings and low interest rates
on loans would entice the market in patronizing the business.
3. Management of the Business
Good management would lead to excellent
operations. And excellent operations lead to give quality service.
4. Employees
Motivated and well-trained employees could help the
bank in giving quality service to its clients. Employees with good
communication skills would have the ability to welcome the
clients and make them feel comfortable when doing their
transactions.
EXTERNAL FACTORS
1. Competitors
The competitors are the most significant external
factor that could affect the market of the bank because more or
less these pawnshops and credit cooperatives provide similar
products and services. The people of Canlaon City do their
banking transactions in San Carlos City, although this is outside
of Canlaon City. It still poses a threat to the new branch of DCDB
because the depositors have already established the trust and
security of their deposits with these banks. It is noted that there
are eight banks in San Carlos namely: Bank Victorias, BPI, DBP,
PNB, Landbank, RCBC, Equitable PCI and Metrobank. Guihulngan
has three banks namely: Landbank, PNB and the Rural Bank of
Guihulngan City.
2. Security
Because of the previous experience with RB Canlaon City,
the market may now be hesitant to open an account with DCDB.
The security of their deposits will be questioned.
To illustrate and summarize the factors, refer to the model below:
Porter’s Five Forces
THREAT OF NEW ENTRY
Threat of New Entry: Expensive to enter except for an
established bank Knowledge not readily available
except for established banks No economies of scale to favor the
initial entrant Low barriers of entry New entrants not necessarily
banks to compete
Competitive Rivalry: Few competitors in area at
present No competitors who can offer the
same quality of service No competitors that can offer all
the services needed Competitor banks are at least 1
hour away by car
Supplier Power: The suppliers would be the
depositors In the case of the government
agencies they are important to the branch, but once there is a MOA (Board Resolution) this should capture them
There is no one else in the location who they can switch to deposit their money
Buyer Power: Low buyer power In the case of the government
agencies they are important to the branch but once there is a MOA (Board Resolution) this should capture them
There is no one else in the location who they can switch to
The government comprises few powerful buyers on price
Threat of Substitution: Substitution is hard because
substitutes are either or more expensive or need more requirements (collateral)
Competitive
RivalrySUPPPLIER POWER BUYER POWER
THREAT OF SUBSTITUTION
SWOT ANALYSISSTRENGTHS
First bank in Canlaon ergo Captive Market-Wide range of financial services-The bank is reputable and is trusted by the community-Deposits are PDIC Insured-Expertise in banking
WEAKNESSES Newly established branch-Not everyone is aware of the bank’s services-Market has low trust in banks because of previous bank closure-Market appears to have a growth limit because of the lack of customers passing through the area
OPPORTUNITIES-All loans of small & medium enterprises-Government patronage -Captive market-Private sector patronage
THREATS-Security-Entry of other banks-Fortuitous events, i.e, eruption of Mt. Canlaon
An analysis of the two tools illustrated above reveal certain
aspects of the industry that the marketing program will have to
address.
An important aspect evident is the fact that the main
advantage of putting up a bank branch in Canlaon City at this
moment is that there is no other equivalent bank (in terms of
range of financial services) in the immediate area. By being the
first, the branch hopes to be able to capture a large portion of
the market before competitors try to enter the area.
In Porter’s model we also see that it will be relatively easy
for a competing bank to enter the area, as there are low barriers
to entry and little to protect the market originally captured by
the initial entrant. Should an equivalent competitor enter the
market many of Porter’s forces would change and there would be
a higher level of threat of substitution, thereby giving the buyers
and suppliers a higher level of bargaining power.
The marketing program may address these two aspects by
vigilant attention to their product mix and the demands of the
market.
H. MARKETING PROGRAM
Before the start of the operations of the bank, an advertising
campaign must be formulated and put into motion. As the government
is foreseen to be a major client, advertising should include this sector
and future products and services should reflect their needs.
Signage should be placed in a few visible areas around the city.
Printed material should also be disseminated showing the bank’s
products and services and its location.
We suggest constructing two billboards announcing the
establishment of DCDB, Canlaon City branch. A suggested site would
be the junction in the Municipality of Vallehermosa to San Carlos and
Canlaon City. Another site to be considered is at the corner of the
national highway and Aquino Avenue, Canlaon City.
Local print and media advertising will be utilized during the last
four months of the construction. The media will always be informed of
any event concerning the bank’s development.
On the City’s charter day or fiesta, the bank should already make
its presence known through sponsorships of various activities.
Various promotional schemes will be utilized to attract customers
to bank with DCDB Canlaon City.
First 100 depositors
Type of Account Initial Deposit Giveaways
Savings Account P500-P5,000.00
P5,001-20,000.00
P20,001 above
Ball pen
T-shirt
Ball pen & T-shirt
Demand Deposit P5,000-20,000.00 T-shirt
P20,001 above Ball pen & T-shirt
Preferred Accounts P50,000 above Ball pen, T-shirt, Bag
Loan Release Ball pen, T-shirt, Bag
Suggested promotional activities for the subsequent years:
For new accounts with initial deposit of P50,000.00 above,
giveaways should be given like ball pens, bag, t-shirt, umbrella
etc (discretion of the manager)
DCDB must be involved in major activities in the city such as city
fiesta, celebration commemorating the founding of the city, etc.
Give out brochures and fliers.
“Summer Extravaganza” Promo – this is between the months of
March to May. Those who will open an account during this time
will get giveaways such as sun visors, summer cap, fans, and
shirt or other summer wear. The freebies would depend on their
initial deposit.
“Savings for the Rainy days” Promo – this is between the months
of June to August. Same details will be undertaken with the
promo during summer but the giveaways would differ. The
freebies would be something they could use during the rainy
season like umbrellas, jacket, cap etc.
For the month of December, calendars and diaries will be given
to the clients.
TECHNICALFEASIBILITY
A.PRODUCT/SERVICES DESCRIPTION
Types of Account Ownership
Individual or Personal Account
The most common type of a bank account is the single-name
individual or personal account in which a single individual transacts
with the bank under his own name. Since the bank deposit is a
contract, only those with legal capacity to enter into contracts may
make bank deposits. Under general contract principles, insane or
demented persons and deaf mutes that do not know how to read or
write, cannot give consent and therefore, cannot enter into contracts,
including bank deposits. The legal presumption that follows when
money is deposited in the individual name of a person is that the
money is his property, and the Bank does not question ownership of
funds deposited. In the absence of fraud, or commission of some other
crime or irregularity, the bank may accept funds for deposit regardless
of its source.
Joint Accounts
A joint account is a joint undertaking between two or more
individuals to open and maintain a deposit account with the bank. It
may take the following form:
a. Joint “and” Account – when an account is opened and
maintained in the name of two persons bound together by the
conjunctive “and”, a co-ownership is created by virtue of which
the ownership on an undivided thing of right belongs to both of
them.
b. Joint “and/or” Account – When two depositors open an
account with the use of the disjunctive “and/or”, either one of
them may deposit and withdraw from the account without the
knowledge, consent and signature of the other.
Business Name/Sole Proprietorship Account
The submission of the application and certificate of registration
issued by the Department of Trade and Industry must first be required
before an account in a business name may be opened. This is
especially true in the case of sole proprietorship in order to ascertain
the true name and real identity of the depositor. Only the registered
owner of the business name may deal with the account, and checks
payable to either the true name or business name may be accepted for
deposit to the account after proper endorsement.
Partnership Account
By the contract of partnership, two or more persons bind
themselves to contribute money, property or industry to a common
fund, with the intention of dividing the profits among themselves.
Corporate Account
A corporation is an artificial being created by operation of law,
having the right of succession and the powers, attributes and
properties expressly authorized by law or incident to its existence. A
corporate account may be opened in the name of the corporation. It is
improper and irregular to open and maintain a corporate account in
the individual name of an officer or any person because funds in a
corporate account belong to the corporation, with the officers acting
merely as agents
Accounts of Unregistered or Unincorporated Association
Social clubs, associations, parish or religious organizations and
other unregistered or unincorporated groups may apply for deposit
accounts. In such cases the bank should require a copy of the articles
of association or constitution and by-laws of the organization, which
should contain provisions on the treatment of funds and designation of
officers authorized to deal with bank deposits. A certificate of
Authorized Officers must likewise be required.
Treasurer-In-Trust Account
A temporary account pending the Securities and Exchange
Commission (SEC) approval of a new entity’s Article of Incorporation.
The treasurer should hold the money used in opening the account in
trust for the new corporation. Treasurer’s affidavit must be submitted.
This account is opened with a set of temporary cards only, to be
replaced by set of permanent cards upon SEC’s approval. No
checkbook should be issued at this point. Usually the client will
request for a Bank’s certification regarding its cash balance addressed
to SEC. This certification should bear the signature of a Bank officer
and duly notarized before presentation.
TYPES OF DEPOSIT ACCOUNTS
Passbook Savings Accounts
Initial deposit P500.00
ADB to earn interest P1,000.00 1.5%
Is a deposit of client’s funds commonly evidenced by a passbook
issued by the bank to the depositor. The funds are withdrawable
anytime upon presentation of the passbook and withdrawal slip duly
accomplished and signed by the depositor, subject to verification of
identity, authority, validity of signature and adequacy of balance.
Current/Demand Deposits Accounts
Initial deposit P5,000.00
Maintaining Balance P2,000.00
ADB to earn interest P50,000.00 1.5%
Is a deposit wherein funds may be withdrawn through the
issuance of checks. Checking accounts provide its users the safety
and convenience of paying business and personal transactions without
carrying cash. It is withdrawable anytime upon presentation of a duly
endorsed check, subject to verification of:
a. Identity and authority of drawer and person presenting
the check
b. Adequacy of balance.
Clients may open a checking account as long as the proper
identification papers and documents are presented and the
requirements complied with. Current account depositors may pre-
order personal or commercial checkbooks with the branch.
Preferred/Time deposits
Minimum deposit P50,000.00
Interest Rate 2.25%-3%
These represent funds deposited with the Bank by clients for a
fixed period of time, thus earning interest higher than that given to
savings accounts. Unlike current and savings account, time deposits
are not subject to check or cash withdrawal upon demand. These
deposits are evidenced by certificates issued by the Bank, which bear
details such as the name of the person to whom the certificate is
payable, the date of issue, amount, interest rate and maturity date.
OTHER SERVICES
Loans (rate:15-18% pa)
Servicing the financial needs of the clients thru borrowing of
funds from the bank either for commercial, industrial, agricultural or
for personal purposes.
Manager’s/Gift Checks
These are checks issued to customers in exchange for cash,
check, or an amount debited against their account. Payment of these
checks and by the bank so much so that they are more acceptable
than ordinary check. Gift checks are issued in different denominations
and serve as gifts for different occasions.
B. BANK POLICIES
The new DCDB Canlaon City branch will follow the bank policies
of that of the Main Branch and other branches as seen in the Bank’s
Operations Policies and Procedures Manual.
Just to cite some of these policies: a branch teller will only have
P25, 000.00 in his/her cashbox possession, as is prescribed in the
manual of operations. The teller will immediately turn over all excess
amounts to the cashier with proper standard documentation of such
transaction. Deposit to other bank transactions releases the amount
from what is available in the cash in vault. Deposit pick-up between
the bank and the client shall follow agreed banking procedures with
professionalism and utmost security.
The cashier and bank accountant will verify cash in vault at the
end of the day. The main cash vault will be in the dual control of two
authorized employees designated by the executive vice president of
the bank. Bank policy states that the vault shall be regularly opened
fifteen minutes before the start of the day and closed at the earliest
possible time.
Amount of the cash in vault follows strictly the reserve
requirement for the day after considering bank’s deposits with which
the Bangko Sentral ng Pilipinas, or BSP, has available for its reserve
cover.
Deposits over one million pesos will be under the anti-money
laundering policy, Republic Act 9160, and its mandatory plan of actions
to handle such transaction. For existing accounts, the deposit
considered large and unusual are those that are ten times the regular
average daily transaction for the immediate preceding six months and
will be subject to such policy also.
Payment of “on us” checks under a savings account for
withdrawals over the counter require:
Amount approving authority
P500.00 and below tellers
P501.00- 20,000.00 any one of the bank officers
P20, 001.00 and above any two of the bank
officers
Dormant accounts are those that don’t show any transaction or
movement for a period of time; current accounts require one year and
savings accounts require two years.
Fund transfers require written authority or a BOD resolution.
Loans and other credit accommodations
A customer’s confidential information sheet contains the following|:
1. Name of client
2. Address of the client
3. Purpose of the loan
4. Deposit/loan accounts
5. If client is a corporation, it must indicate the following:
- Ownership/ management/ officers or BOD
- History of the corporation
- Significant highlights/ products of the corporation
- Financial standing which is current to the last two to three
years
- The suppliers and credit dealings
- Competitors and affiliate companies.
Offering Ticket and Credit Approval Memorandum
1. The heading contains a detailed explanation of the subject/s
concerning the loan application, the type of credit facility to be
issued, and amount of the loan and the date of preparation of
the memorandum.
2. The terms and conditions for the payment of the loan applied for.
3. The client’s confidential information sheet.
4. The client’s financial statements for the current past two to three
years.
5. Proof of security and/or collateral support for the loan
application.
6. Credit investigation.
7. Recommendation of loan processor/ account officer to the
approving body/ officer of the bank.
Credit Authority Structure of the loan approval/ levels of approving
authority
1. Board of Directors
2. Executive Committee
3. President
4. Executive Vice President/ Vice President
5. Assistant Vice President
Designated “approving officers” are empowered to execute and
sign for and in behalf of the bank as long as the loan agreement is
governed by the bank’s policy on extension of credit, prevailing credit
memorandums/ policies issued by the bank from time to time and
pertinent laws, rules and regulations issued by the bank compliance
officer, the BSP and some government authority.
General Approving and Signing Authority
Levels of Authority Approving body/ officer
- Broad, strategic and long-term credit Board of Directors
policies and directions
- New and/ or amendments in existing Board of Directors
credit programs and necessary guidelines
- Operating policies, plans, guidelines, President/ EVP/ VP
rules and regulations, to effectively implement the
approved credit policies and programs
Secured loans Approving body
- up to single borrower’s limit Board of
Directors
- up to P5.0 M EXECOM
- up to P500 T President/ EVP/ VP
- up to P100 T AVP
Unsecured loans
- up to single borrower’s limit Board of Directors
- up to P1.0 M EXECOM
- up to P500 T President/ EVP/ VP
In the signing of bank business documents, deed of real estate,
mortgage/ mortgage agreements, cancellation of mortgage, disclosure
and release of statements, a branch manager is empowered to
perform such duties. But all memorandums of agreements concerning
refinancing programs and/ or special projects are the responsibility of
the President/ Executive Vice President/ Vice President..
Collection of Accounts
1. A first notice is prepared by the branch bank loan processor and
is mailed through the ordinary post office mail fifteen days
before the loan’s due date.
2. A second notice is mailed through registered post office mail one
week after the loan’s due date. Enclosed is a statement of the
account.
3. A mail inconvenience letter is mailed fifteen days after the
receipt of the second notice.
4. A lawyer’s letter will follow, giving the subject fifteen days to
settle the account’s business before instituting judicial or
extrajudicial proceedings.
5. If there is no payment/ settlement after fifteen days of the
receipt of the lawyer’s letter, judicial and extrajudicial
proceedings will be instituted.
Loan processors/account officers are advised to exhaust all means
to collect all past due accounts and try to apply all mitigating
measures to help the account get back to its current status.
Foreclosure proceedings shall apply only as the last recourse of the
bank.
“In case of non-payment of the amount of this note by any
amortization on demand when due, or any other amount or amounts
due on the account of this note, the entire obligation plus interest and
penalty and whatever advances made by the bank shall become due
and demandable at the option of the bank.”
All of these products and services will be offered by DCDB
Canlaon City Branch. Special thought should also be given to specific
Agricultural loans and programs designed to: improve irrigation
infrastructure, provide post harvest facilities such as mechanical dryers
and rice mills, seed bank programs, livelihood programs, agricultural
mechanization, and micro-financing and other entrepreneurship based
loans.
C.BANK LAYOUT
BANK LANDSCAPE
D.EQUIPMENT/SUPPLIES
Security Devices Price
Cash vault P60,000.00
Vault Doors 68,000.00
Time Locks 1,363.00
Combination Locks 14,575.00
Burglar Alarm 23,200.00
Hold up Alarm (3 @ 2,440) 7,320.00
Records Vault 38,000.00
Cash Steel Safe 10,956.00
Total P223, 414.00
Equipment Price
Adding Machine P2,750.00
Bill/Money Counter 40,000.00
Coin Counter 30,000.00
Check Writer 4,494.82
Doc Stamps Machine 18,160.90
Typewriter 2,185.50
Computer 6 @ 28,550.00 171,300.00
Printer 5 @ 2,495.00 12,475.00
Generator 42,800.00
Fax Machine 6,995.00
Filing Cabinets 2 @ 4,000 8,000.00
Tables and Chairs
ATM Machine 24 hours
20, 000.00
272,187.00
Total 631, 348.22
Stationary and Supplies Price
Scissor [email protected] 252.00
Push Pin 26.00
Clip paper 24.75
Foldback clips 19.00
Fastener 10.50
Cutter 33.00
Eraser 6.25
Sharpener 20.25
Ring Files 138.50
Clear tape [email protected] 234.00
Masking tape [email protected] 121.50
Glue 47.75
Long Folder [email protected] 96.00
Short Folder [email protected] 51.00
Lond Bond paper 1 rim 224.25
Short Bond paper 1 rim 202.75
Record Book 106.50
Stapler
1,015.50
Puncher [email protected] 568.50
Staple Wire [email protected] 432.00
Journal Book [email protected] 144.00
Ledger [email protected] 174.00
Total 3, 948.00
E. BUILDING PLAN
As to be determined by the Board of Directors as of the
moment. Our recommendation is to purchase a bigger piece of land
and develop a commercial complex containing retail, service, and
other business including the bank. Offer this as a start for the small to
medium entrepreneurs of the city. Suggested types of business are a
grocery store and a restaurant or service providers.
FINANCIAL
FEASIBILITY
A. GENERAL ASSUMPTIONS
The first general assumption is that through a passed city board
resolution, the DCDB Canlaon City branch is made the government’s
depository for the city and region. All government financial
transactions including the payroll of the government employees and
public school teachers will avail of the bank’s services.
Quarterly Internal Revenue Allotment (national) P44,574,756.00
Monthly local collections (taxes, permit, etc.) P14,224,342.32
TOTAL P58,799,098.32
The group makes a general assumption that excess cash will be
loaned out to DCDB main branch at the rate of 9 percent per annum.
Operational Assumptions
a) Bank hours will be from 9:00am to 3:00pm
b) Employees will work till 8:00am to 5:00pm with 1-hour lunch
break.
c) The bank will be open on weekdays and be closed on all
public and special holidays.
d) Cut- off for clearance of cheques will be 9:30am to allow for
travel time to BPI San Carlos whose cut-off time is 11:00am.
e) Excess funds will be deposited with BPI- San Carlos. A portion
may be invested in government securities at manager’s
discretion subject to restrictions.
f) Maximum of 10 percent current/saving deposits will be kept
as cash in the vault
g) Company will procure a motorcycle for bank use.
h) Main office will provide a service vehicle for the branch
manager’s use.
i) There will be a provision for an ATM machine in the bank
layout but it will not be installed in the first year of operation,
until the bank will be financially stable to purchase one.
j) All policies and regulations of the department of labor and
employment (DOLE) will be complied with.
k) All policies, rules and regulations of the DCDB main office will
apply to the branch office.
l) The first branch manager will be an officer from DCDB main
office.
m)Rank and file staff will be recruited from qualified residents of
Canlaon City.
Revenue Assumptions
a) One percent service charge will apply to all government
transactions.
b) Two percent service charge will apply to all payroll
transactions.
c) Agricultural loans will have an interest rate of 15 percent
d) Commercial loans will have an interest rate of 15 percent.
Expense Assumptions
a) The salary of the bank branch employees will have a three
percent merit increase every year after having rendered a minimum of
1 year of efficient service.
b) The utility expense will increase according to current market
statistics.
c) Bank premises, furniture, fixtures and equipment are carried
at acquisition cost or construction cost less depreciation and
impairment losses.
Depreciation is computed on the straight-line basis over the
estimated useful lives of the assets as follows:
Buildings 40 years
Furniture, fixtures and equipment 1-10 years
Leasehold improvements are amortized over the terms of the
related leases or the useful lives of the improvements whichever is
shorter.
SOCIO-
ECONOMIC
FEASIBILITY
A. ECONOMIC ASPECT
We foresee the bank branch having an economic impact on the
community. Services offered by the bank will most probably affect
certain prevalent social behaviors.
For instance, people will no longer have to purchase unnecessary
items in order to have their checks cashed locally. Trips to and from
San Carlos City or elsewhere for the purpose of cashing checques and
obtaining money will be minimized. Following this line of thought,
people may travel less and demand that local establishments upgrade
their products and services which are otherwise found in San Carlos
City, Bacolod, or Guihulngan.
More convenient access to financing may encourage more
people and establishments to avail of loans for home or business
improvements.
Industrial loans will promote the growth of businesses in the
community. This in turn could lead to more employment opportunities.
Agricultural loans could lead to higher productivity through
improvements in farming practices.
B. SOCIAL DESIRABILITY
Having the services of a bank brings quite a confidence boost to
a young city like Canlaon City. Once again it is given the opportunity to
present itself’ “as a special growth center of Northern Negros” with the
capacity of a financial banking institution. The entrepreneurs will have
the financial confidence, as well as convenience and security, to
establish them in the local and even international business markets.
Having the knowledge, and the assistance, to decide how to
invest and use a loan wisely bring confidence in all working people.
The agricultural sector should be given an opportunity to avail of
services that will save for the future, at the same time increase their
power as consumers.
C. JOB OPPORTUNITY
As for the bank, there will be a staff of at 6 persons, not including
the security guards. The tellers, bookkeepers, clerks and messenger
can be locally hired if qualified.
As for the city, the bank provides the ability, for small to medium
business entrepreneurs through loans, to put up the business, which in
turn creates jobs.
As for the agriculture sector, through education and
communication, will develop the consumer confidence that can fuel the
city’s economy thus creating more jobs. The agricultural community
will also benefit from having the capital to utilize more efficient means
of production such as mechanization, improved storage and handling
facilities.
LEGAL ASPECT
When starting a business, it’s crucial that the owner must be
familiar with the basics of business law. Most businesses legal
troubles are the result of unclear documents. Whether one deals
with employees, contractors, or the services that offered, there are
certain legalities that one should consider.
In applying for a Mayor’s permit, the bank must submit a copy
of the SEC registration. Zoning and Locational clearance and
certificate of building inspection must be obtained from the
Engineering department. And then proceed to the Bureau of Fire
Protection for the Fire Safety Inspection clearance. The officer-in-
charge will then assess the building for architectural presentability,
structural stability, sanitary inspection and signage. Assessment and
Payment must be made and after that is the issuance of
Business/Mayor’s Permit.
Since the project is to establish a bank, legalities with the
Bangko Sentral must also be accomplished. The application for
authority to establish a bank should be completed before the
requirements for the issuance of authority to operate is complied
with.
After the inauguration of the bank, within 30 days from the
date of opening, another set of requirements must also be submitted
to the Central Bank.
For the bank operations, as mentioned in Republic Act 8791, The
General Banking Law, Section 21, “Banking Days and Hours” are,
“Unless otherwise authorized by the Bangko Sentral in the interest of
the banking public, all banks including their branches and offices shall
transact business on all working days for at least six (6) hours a day.
In addition, banks or any of their branches or offices may open for
business on Saturdays, Sundays or holidays for at least three (3) hours
a day: Provided, That banks which opt to open on days other than
working days shall report to the Bangko Sentral the additional days
during which they or their branches or offices shall transact business.
Chapter 7 of Republic Act 7906, or An Act Providing for the
Regulation of the Organization and Operations of Thrift Banks, And for
Other Purposes, states exemptions which a thrift bank is legally
entitled to. Briefly, the exemptions are: 1) tax emptions; 2) exemption
from publication requirement; 3) exemption from notarial charges; 4)
exemption from registration fees.
For the proposed project, it shall be opened from Monday thru
Fridays, 9:00am to 3:00pm. However, employees are set to work from
8:00am to 5:00pm with a 1-hour lunch period.
PRESENTATION, ANALYSIS AND INTERPRETATION OF DATA
Figure 1. Age Bracket of Respondents
5% 14%
25%26%
6%12%
12%
Below 20
21-30
31-40
41-50
51-60
above 60
No Answer
Figure 1 shows the age bracket of respondents. Twenty-six
percent of the respondents are aged between 41-50 followed by 31-40
years old, 25 percent. A total of 77 percent of the respondents can be
considered to be in the wage earner age.
Figure2. Gender of Respondents
29%
58%
13%
Male
Female
NO Answer
Figure 2 shows that 58 percent of those who answered the
questionnaires are female and 29 percent are male. Thirteen percent
did not specify their gender
Figrue 3. Civil Status of Respondents
57%
7%
23%13%
Single
Married
Widow
No Answ er
Figure 3 shows the civil status of the respondents. Fifty-seven percent
of those who responded are married and 23 percent are single. Seven
percent are widowed and 13 percent did not specify their status.
Figure 4 shows the bracket for the number of members in the
respondent’s family, 58 percent, 1-5 members; 20 percent, 6-10
members, and 22 percent did not specify.
Figure 5 shows the range for the monthly income of the respondents.
Out of the 384 respondents 114 of the respondents earn between
P5,001 to P10,000. This is followed by 104 respondents, earn below
P5,000. The researchers sought to determine if the respondents
belonged to the income generating body of Canlaon City. According to
this data 56 percent of the respondents belonged to the 10,000 and
below monthly income bracket. Even if a large portion of the sample
size earn 10,000 or below we can see from the succeeding graph that
44 percent of the sample population spend below 5,000 pesos a
month. This would mean that at least some if not most of the 10,000
peso and below income earners will also only expend 5,000 pesos per
month. We can imply from this that even though a large percentage of
the sample population earn a relatively low monthly income their
monthly expenses are still low and this is encouraging as it may be an
indicator that even the lower income earning individuals may still have
the capacity to save. This presupposes that the lower income earners
are also the ones who have a lower monthly expenditure, which it is
logical to assume.
Figure 6. Monthly Expenses of Respondents
44%
27%
18%
8% 3%
Below 5,000
5,001-10,000
10,001-15,000
Above 15,000
No Answ er
Figure 6 shows the monthly expenses of the respondents. The
researchers wanted to know the spending power of the residents of
Canlaon. Forty-four percent of the employed sector spend below 5,000,
twenty seven percent spend P5,001-P10,000, eighteen percent spend
P10,001-15,000 and 8 percent of the respondents spend P15,000 and
above.
Figure 7. Monthly Savings of Respondents
18
227
79
23 289
0
50
100
150
200
250
None Below 1,000 1,001-5,000 5,001-10,000 Above10,000
No Answ er
Series1
Figure 7 shows the monthly savings of the respondents. From their
monthly income, 227 respondents answered that they save below
1,000. 79 respondents save between 1,001-5,000. And 23 respondents
save between 5,001-10,000. There were 18 who answered none and
28 respondents did not specify their savings. The researchers sought
to establish that people still save money. This question also served to
determine the amount of savings of the sample population.
Figure 8. Exsisting Bank Account
60%
36%
4%
yes
no
no answ er
Figure 8 shows that 60 percent of the respondents already have an
existing bank account with other banking institutions outside Canlaon
City and thirty six percent don’t have bank deposits. The researchers
wanted to determine the percentage of those who avail of the services
of a bank and those who don’t.
Figure 9. Existing Banks
PNB
Land Bank
DBP
RB Guihulungan
EPCIB
BPI
RCBC
Union Bank
Victoria's Bank
UCPB
Allied Bank
RB Tanjay
Metrobank
0 10 20 30 40 50 60 70 80 90
Figure 9 shows the existing banks that the respondents specified. It
shows that the majority of the respondents who avail of banking
institutions outside Canlaon City go to Landbank San Carlos or
Guihulngan. These banks also pose as competitors to DCDB. Although
located outside of Canlaon City, but still are catering to banking needs
of target market of this study.
Figure 10. Products and Services of Existing Banks
46%
7%8%
4%
11%
8%
5%
5%2% 1%
Savings
Time Deposit
Checking Account
Utilities Payment
Loans
Credit Card
Remittances
Direct Deposit
Income tax Assistance
Wire Transfers
Portfolio Management
Figure 10 shows the products and services of the existing banks
which the respondents avail of. It shows that the bigger portion of
the pie goes to savings accounts deposits (46 percent). Eleven
percent avail of the loan services of their banks.
Figure 11 shows the current problems the respondents
encountered with their banks. Twenty-six percent indicated that
the main problem is the low savings interest rates that their
current bank offers. Eighteen percent indicated distance to their
banking institution was a problem.
382
2
0
100
200
300
400
Yes No
Figure 12. Respondents in Favor of DCDB Branch
Yes
No
Figure 12 shows the number of respondents in favor of the
establishment of a DCDB branch in Canlaon City. Only 2
respondents are not in favor. One respondent who answered No
said that the bank would be a future competitor of the office the
respondent is currently working for.
Figure 13. Ideal Location
City Proper/Centre
Mabigo Midtow n
Near Public Market
City Hall
Near Police Station
EXODUS Ave.
Near the School
Old Ceres Terminal
Bautista's Estate
Anyw here Within the city
Along National Highw ay, 7
0 20 40 60 80 100 120 140 160
Series1
Figure 13 shows the sites the respondents prefer as a location for
the bank. The majority said that it would be best if the branch would
be situated in the city proper or the city center. This is actually
misleading as Mabigo Midtown and City Proper are the same place. In
effect almost 60 percent of the population prefer the midtown area for
the location of the bank branch. The group are recommending a site
outside of that area due to price considerations. However, the
researchers believe that regardless of where the bank will be located in
Canlaon City, it would be only minutes away from the city center
Figure 14. Banking products and services the respondents wants to avail
2.96%7.78%
2.36%4.24%
6.31%9.66%10.94%
9.95%5.32%
3.65%
35.17%
1.58%
0.10%
Savings Account
Time Deposit
Remittances
Wire Transfers
Checking Account
Utilities Payments
Direct Deposits
Portfolio Management
Loans
Credit Card
Income Tax Assistance
ATM
SSS Pensioner
Figure 14 shows the products and services that the respondents would
like to avail of if the plan for a DCDB branch in Canlaon City
materializes. 35.17 percent for savings deposits, 10.94 percent for
time deposits, and 9.95 percent for loans.
Figure 15. Other Financial Institutions Utilized By Respondents
47.9%
20.2%
22.9%
7.3% 1.7%
SSS/GSIS
Paw nshops
Credit Coop
Informal Lending
Others
Figure 15 shows the other financial institutions utilized by the
respondents. These institutions are also considered as competitors of
the bank because they offer similar products and services such as
small loans and cashing of cheques. The chart shows that 47.9
percent of the respondents avail of services from SSS/GSIS. 20.2
percent of the respondents go to pawnshops and 22.9 percent to credit
cooperatives. Others go to informal lending institutions such as the “5-
6”, meaning for every five pesos barrowed, six pesos must be
returned.
Figure 16. Respondents who would avail of DCDB products and services
YES99%
NO1%
YES
NO
Figure 16 shows the percentage of the respondents who would avail
of DCDB’s product and services. Out of the 384 respondents, 99
percent would readily avail of these services and only 1 percent
would not because the bank would be a threat (competition) to the
company the respondent works for.
SUMMARY OF FINDINGS, CONCLUSIONS AND
RECOMMENDATIONS
A.FINDINGS
1) There is a demand for a bank in Canlaon City. Only two of 384
respondents did not see a need for a bank in the area. This
makes up .5 percent of respondents not in favor of a bank in
Canlaon.
2) The socio-economic profile of the community indicates that a
significant portion of the community saves. Specifically, the
survey revealed that from their monthly income, the majority
(227 respondents) answered that they save below P1,000.
This comprises 59 percent of the total respondents.
3) A majority of respondents (35.17 percent) are willing to
establish a savings account with the proposed bank. 10.94
percent would put their money in a time deposit account, and
9.95 percent would avail of bank loans.
4) The government’s monthly revenues are as follows:
From taxes, licenses, and permits: P14,224,342.32
From National Government Subsidiaries: P44,574,756.00
From other sources: P1,233,522.76
B. CONCLUSIONS
Based on the above findings, we conclude that the proposed
branch of DCDB cannot rely on revenues generated by non-
government sources such as interest from loans. This is because the
income-earning non-government sector has very little power to save
amounts of any significance. Despite the widespread desire for a
formal banking institution, any revenue generated from savings
accounts, loans, and other fees would be negligible. The general
economic level of the city shows that there are no large enterprises
and that the city is predominantly agricultural.
Despite this deficiency, the large Internal Revenue Allotment
(IRA), revenues generated by fees from taxes, licenses, and permits,
and the government payroll, coupled with the present administration’s
willingness to have the proposed bank act as its official depository
offsets the low saving power of the private sector.
In conclusion, we find it feasible to open a branch in Canlaon,
only if the proposed bank branch can capture the government market
and act as its official depository at the outset.
C. RECOMMENDATIONS
We therefore recommend the following:
1) Obtain a board resolution from the local government
designating the proposed bank as its’ official
depository.
2) Obtain approval from the Banko Sentral Monetary Board
allowing the DCDB branch to act as the official local
government depository in the absence of an existing
official depository in the area.
3) Purchase the site of the proposed branch. Later when
feasible, buy the surrounding lots for future expansion
including after business enterprises.
4) To insure the continued support of the local government in
the advent of competitor banks entering the market,
continuously update products and services in order to
meet the government’s evolving needs.
5) In the first three years of operation the bank should:
a) Be conservative with its loan exposure
b) Maintain a level of liquidity at or above the industry
average
APPENDICES
Appendix A
Survey Questionnaire
SILLIMAN UNIVERSITY DUMAGUETE CITY, 6200
PHILIPPINES
Dear Sir/Madam:
This is a letter of introduction from the students enrolled in BA240 (Feasibility Study) of the Masters Degree Program in Business Administration of Silliman University.
In partial fulfillment of our academic requirements, we are preparing a feasibility study to be conducted in your area.
Specifically, the study aims at determining the feasibility of establishing a branch of the Dumaguete City Development Bank (DCDB) in Canlaon City, Negros Oriental. While this study is academically driven, this is a live study, and we have the support of our proponent, the DCDB, as well.
In this regard, we are seeking the cooperation of various entities from the local government of Canlaon City, and from the public and private sectors in your area. As representatives of both our school and the DCDB, be assured that we will conduct ourselves as this study with the utmost professionalism required of us.
We will be grateful for any assistance that you may extend to us by answering the attached questionnaire thoroughly. All responses will be kept strictly confidential. Thank you for your time.
Yours truly,
Rene Juntereal Katherine S. Calibat
Maldon Tiempo Sina Pourabrisham
Maricris Joy Tan Bert Riego
Victor Cal
Noted by:Atty. Gloria G. FutalanProfessorMBA Program, CBASilliman University
THANK YOU FOR THE TIME AND EFFORT YOU SPENT IN ANSWERING THIS QUESTIONNAIRE. THIS INFORMATION WILL REMAIN
CONFIDENTIAL.
Name (optional):_________________________________________________Address:_________________________________________________________Age:_________________________Gender__________Civil Status________Occupation:______________________________________________________Place of Work:____________________________________________________Number of Members in the Family:________________________________
INSTRUCTIONS: Please put a check (/) on the space provided for your answers:
1. How much is your monthly income?_____ below P5,000 ______P15,001-P20,000_____ P5,001-P10,000 ______P20,001-P40,000_____ P10,001-P15,000 ______ P40,001 and above please
indicate the amount __________
How much are your monthly expenses? _____ below P5,000 ______ P5,001-P10,000 _____ P10,001-P15,000 ______ above P15,000 please
specify:______________
How much of your monthly income do you usually save? ______ below P1,000 ______ P1,001- P5,000 ______ P5,001 – P10,000 ______ above P10,000
2. Do you have an existing bank account? ______ Yes Please specify the bank:______________________
______ No With what financial entity do you bank?_________
3. What kind of services do you avail of from your bank? ____Savings deposit ___ Time Deposit ___Checking Acct
____Utilities Payments ___Loans ___Credit Card(s) ____Remittances ___Direct Deposits ___Income Tax assistance ____Wire Transfer ___Portfolio Management
4. What problems if any, have you encountered with your existing bank?
____slow service ___low savings interest rates____long queues ___high interest rates for loans____no parking ___ unaccommodating staff
Others please specify________________
6. Are you in favor of Dumaguete City Development Bank (DCDB) opening a branch in Canlaon City? _______YES
______ NO
If no please state your reasons__________________________________________
7. What kind of banking services wound you want to avail of?_____savings accounts _____checking account _____loans_____time deposit _____utilities payments ____credit card(s)_____remittances _____direct deposits ____wire transfer_____income tax assistance _____portfolio managementothers______________________________________________
8. What financial institutions have you utilized at this time?____SSS/GSIS/Pagibig _____Credit cooperatives____Pawnshops _____informal lending(5-6,etc)____others please specify___________________________
9. If DCDB opens a branch in Canlaon City, would you readily avail of its services? _______YES __________NO
10. Please write your comments and suggestions on the proposed project in the space below:
Comments and Suggestions Given by Respondents
I believe that Canlaon City does need a bank in order to augment
our livelihood through its banking services and to provide
security in any amount of money we can save.
The proposed establishment of DCDB in Canlaon City will be very
beneficial to its residents especially to businessmen and planters
since the city has no existing bank and other financial
institutions.
The proposed project is a big honor for the Canlaonians for it will
not cost them too much for the fare and time in going to San
Carlos to deposit or withdraw their money.
I want this proposed project to be fulfilled and accomplished
because I want to change the economic situation of the city and
life of the people in Canlaon City. “Kaya dapat lang ipatupad
ninyo ngayon ang plano ng DCDB.”
There should be low interest rates imposed, fast release of
transactions, and not too many or difficult requirements to
procure.
I would like to suggest the following:
1. High interest in savings account
2. Accommodating staff
3. Offer quick loans release
4. Must have good location and parking area
This is a very feasible project for the city to improve its economic
situation and to provide convenience of its residents. People will
learn to save and there will be lesser risk for us to transact
banking business in other places far from the city. We hope that
the project will be implemented this year (2007). More power to
the project!
Make the project soon. It will provide us convenience, the ability
to manage our finances and improve the economic situation in
Canlaon City.
Place ATM Facility
Please hurry.
It is good and for the welfare of the people in Canlaon City
specifically.
Good idea but you need to study it further.
I hope your DCDB branch in Canlaon City will be a success.
Please respond and just do it!
Please put up an ATM Machine in Canlaon City for the proposed
DCDB branch.
Please construct your building as soon as possible.
I hope that this project will push through.
The earlier you open the better so we can avail of its services.
We need to have a bank in Canlaon City.
We will be very grateful if we will have a bank in Canlaon City.
Here are my suggestions:
1. Have easy access on any transaction
2. Have accommodating staff and personnel
3. Must be located at the heart of the city
I am highly in favor of the proposed project.
We will be very happy if your proposed project will be
materialized.
Please realize this feasibility study. It will be a big help to the
Canlaonians.
If we will have a bank here in Canlaon City, there will be no need
to go to San Carlos City just to deposit our money.
Putting a bank in Canlaon City is very necessary considering that
our city is far from San Carlos City and Guihulngan City were
banks are located.
Happy to have one because not even one bank is available in
this city.
This proposed project is very good.
The project proposed is very good especially here in Canlaon
City. We need a bank here so please make it true.
Here in our place I agree that this city should have a bank in
order that people here can easier deposit their money.
It is ideal to establish a bank in the city since at the present the
city has no banking institution.
It is better that we have a bank in the city so that the people of
Canlaon City can deposit their money and can avail of loans for
the development of their business for better living.
The sooner the better.
Do it now!
ASAP.
Project proposal is very good to us especially there is no existing
bank.
Do good service.
It is a good proposal so that we will not be going out of Canlaon
City.
Very good proposal.
ASAP.
If we have DCDB here in Canlaon City, we can easily deposit or
withdraw in our saving account.
SUGGESTION: “It is good if there is ATM in the said bank”
To improve Canlaon City.
I suggest that you will open a bank.
It is good to have a bank in Canlaon City for convenience.
Hoping you will open your branch here ASAP.
We would be grateful to have a bank in Canlaon City.
We would be grateful enough to have a bank at Canlaon City in
order for us to save expenses in going to San Carlos City to get
out money sent sometimes from a distance relative.
The project of pulling up a branch in Canlaon City is very
beneficial to the constituents considering that as of the moment
there is no available bank at the place.
For me it is better to have the proposed project in our city.
Much better if you open DCDB here so that is easy for us to open
saving accounts.
It is a good project; if this will be materialized may be most of the
depositors will no longer go to San Carlos City where banking
institutions are.
I hope that DCDB branch in Canlaon City will be realized ASAP.
It is a good project if this will be materialized plenty of residents
here will be benefited since we don’t have any banks in here in
at place. I hope this will be materialized soon.
I suggest that the proposed project must be implemented
immediately, because we need vary badly the bank in Canlaon
City.
I personally and urgently request for the implementation of the
proposed project for the benefit of the constituents of Canlaon
City.
I suggest that you will open or install an ATM machine so that our
problem in going to San Carlos City will be solved.
It’s a good opportunity for us to have a banking institution in our
city. It will facilitate the safety of the government funds of the
city of Canlaon City and later the financial transactions of the
constituents of the city and barangays and the neighboring
towns as well.
Early action for this project.
I think this is a good decision to open a DCDB branch here in our
place so that we can avail of bank transactions in a short period
of time because mostly we have our transactions in the cities of
San Carlos, Guihulugon and Dumaguete and we need more or
less than 1 day of traveling and transacting.
”needed the soonest possible time”
Afraid of bankruptcy especially on private banks.
I want immediate action if ever…..
Hope it will rise soon.
This proposed project is really needed in our place.
As early as possible you can open your branch here in Canlaon
City so that we can avail of your services.
Hope that this Feasibility Study will be materialized as early as
possible.
It would be convenient for the people of Canlaon City to do
banking business.
It would be nice if the said proposed project will push through so
it could be convenient for the people here and have their saving
deposits. They don’t have to travel to San Carlos to deposit so
with the city government as it would be less risky.
Good project proposal. Salamat!
I hope this will be materialized.
Madaliin ang pag-open kasi wala kaming banko rito.
Easy to deposit.
This proposed project is really needed here in Canlaon City
because we don’t have any existing bank.
This will be a great help to our city and to the people of Canlaon
City.
This proposed project is needed in our locality.
If in case BSP will grant DCDB an authority to oparate in our area
business will improve their sales, many supply increases and
peoples way of life eases.
We will be very happy if you will open here in our city because
we really need a bank here.
Give low interest for loans.
Hoping that this proposed project will be operating soonest.
The P300.00 back and forth fare is a lot of money in just
withdrawing or applying loan, if takes time for how many hours
we have to be absent or on leave, whereas if have here in
Canlaon City, it’s a great help and great favor for all employees
including businessmen/women/people.
Canlaon City has a strong demand for banking institution and if
DCDB will decide to put up a bank, the pros and cons must be
thoroughly considered. There must be a strong tool or procedure
to safeguard the investment, particularly loan and credit.
Hanep because no bank in Canlaon City.
It’s nice/good to have a branch here in Canlaon and it’s an
opportunity for the Canlaonians and for me to have an access of
DCDB services especially an agricultural loan, since the area is
the agricultural basket of Negros Oriental.
This would benefit the residents of Canlaon and safety of keeping
code.
Can it be as soon as possible? Please!
I hope and pray that this proposal will come true to this city
because its very hard for us Canlaonians.
It will be beneficial to the people of Canlaon but it would be a big
thread to the company that I’m working with. It will be a future
competitor of our office.
As early as possible.
Canlaon City badly needs a bank to cater to the needs of the
people. We would be vary happy if DCDB decides to open a
branch here. Best regards.
We are in favor to have a branch here in Canlaon City, Negros
Oriental, so that the people experience and know how to save for
their own good for the future.
I suggest that the proposed project will be implemented as soon
as possible.
Canlaon City is the city with no banking institution where in
people are looking forward.
For immediate implementation of the project.
We really don’t have fixed income. Last few years I was able to
avail of banking services from DBP and other banks in San Carlos
City. It is unwise to place your savings in places where you have
to spend and several pesos will be wasted for your fare
back and forth. I realized I was not saving because of the
distance from the bank to our place. I would be vary happy to
avail of services from your bank because this is what is lacking in
our place. I hope you will open the soonest possible time.
Soon the bank will be open.
I’m very happy if DCDB will open here in Canlaon City for the
convenience of the people.
It’s okay to have a bank here in Canlaon so it’s easy, especially
for the students on their allowances.
Big investors are hesitant to come to Canlaon for no bank is
available and they have no travel an hour to San Carlos City for
banking services. If DCDB opens its branch in Canlaon, it would
be a boost to our local economy and an eye opener for the locals
to save or deposit their money to the bank instead of hiding it in
certain places that might lead to loss or impulse spending.
It should be at the city center.
For additional employment of Canlaon people.
1) Additional employment for the people of Canlaon City.
2) Easy to access for any transaction.
3) A town or city should have a bank for the safety or their
financial transaction.
The office I’m working is very interested in opening an account
for there is no bank here in Canlaon City.
1) Make this project possible.
2) The strategic location for banking is Mabigo proper.
3) Before starting, advertisement and promotion must be given
for barangays.
Please make this proposed very soon.
1) Easy access for any transaction.
2) Accommodating personnel and staff.
3) It should be at the heart of the city.
1) Must have low interest rates of loan.( credit services)
2) Must have character loans.
3) Must provide social services to the clients.
4) Short time processing.
It’s very good to have a bank in Canlaon City, so that they can
help Canlaon City in economic progress.
I’m in favor of DCDB opening a branch in Canlaon City because
there is no existing bank here.
Include assistance to farmers with affordable interest rate.
Give agricultural loan assistance to Canlaon City farmers with an
affordable interest rate.
I want to have a bank in Canlaon City so that I can easily save
very money or deposit, instead of going to San Carlos.
APPENDIX B
Banking Laws
APPENDIX C
BSP Forms
APPENDIX D
Permits, Clearances,
Licenses
APPENDIX E
Taxation
APPENDIX F
Map &CDS of
Canlaon City